NIESR's growth forecast is slightly more pessimistic than that from the government's official budget watchdog and the Bank of England, which expect the UK's economy to grow 2.4% and 2.5% respectively in 2016, although both forecasts were compiled before the latest bout of concerns over a slowdown in China.

"A near-term slowdown in export growth, predominantly a result of weaker demand from emerging markets, is offset by an acceleration of domestic demand as falling oil prices and a marginal loosening of policy act to bolster consumer spending," the think tank said in a statement.

"Growth accelerates again in 2017 as the improving external environment strengthens export demand."

Ahead of the Bank of England's meeting, which takes place on 4 February, the study added Threadneedle Street officials are unlikely to raise interest rates any time and as such it expects inflation to rise only 0.3% over the next 11 months.

Data released in January, showed price inflation in the UK edged slightly higher in December, as Britain's consumer price index (CPI) grew by 0.1% month-on-month in December, while analysts had expected growth to remain stagnant, as it had been in the previous month.

"A key judgment for our forecast is the timing and pace of monetary tightening," the report added.

"We have pushed back the point at which we think the Monetary Policy Committee is most likely to begin raising bank rate to the second half of 2016, based on recent communications by committee members and the timing of the UK's impending referendum on membership of the European Union."